Question

Select the correct items that match the description. Distributions of cash from a corporation to its stockholders. select an appropriate term Consumed assets or services. select an appropriate term Ownership is limited to one person. select an appropriate term Officers and others who manage the business. select an appropriate term Creditor claims against the assets of the business. select an appropriate term A separate legal entity under state laws. select an appropriate term A report prepared by management that presents financial information. select an appropriate term A section of the annual report that presents management’s views. select an appropriate term Future economic benefits. select an appropriate term Involves acquiring the resources necessary to run the business. select an appropriate term

Answer 1

Answer & Explanation

Distributions of cash from a corporation to its stockholders: The Dividends accounts will represent the amount of cash give it to stockholders

Consumed assets or services:

prepaid expired

When a company pay his rent in advance for example, it will use a prepaid rent account

Over the course of time it will decrease this account and declare the rent expense

Ownership is limited to one person:

Sole propietor is the business form at which a single person is the owner of a firm. However, the sole propietor can have employees.

Officers and others who manage the business:

board of director

Creditor claims against the assets of the business:

Secure Liability will be for example a mortage on which the creditor as a collateral on a firm asset (real-state)

A separate legal entity under state laws:

A subsidiary will be different legan entity under the law but in real life it will be part of the company. Generally the parent company present consolidated statements which include the subsidiary to amend this.

A report prepared by management that presents financial information:

Annual report or managerial statement or managerial report

A section of the annual report that presents management’s views:

Management discussion and analysis (MD&A)

Future economic benefits:

The Assets of the company are the way it has to generate future economic benefit. His inventory, equipment, cash and investment can generate benefit in the future.

Involves acquiring the resources necessary to run the business:

purchase of assest to mantain the business going.